What Is A Tuition Fee Loan And How Does It Work In Singapore?

Institutions of higher learning in Singapore are a cornerstone of the success of most students.
However, it will cost you an arm and a leg to undertake your studies, whether you enroll in NUS, NTU, SMU, SIM, MDIS, PSB Academy, or a foreign university.
For an undergraduate degree, it might cost you a 5-figure sum to complete it, while an advanced degree (such as a Master’s or PhD. program) would cost you something close to or more than a 6-figures sum – which is quite hefty.
As a result, you may be looking for ways to better finance this next step in your life and make your educational and career dreams a reality.
Read on to find out more about Tuition fee loans that you could take up so that you can hop onto your years of college life with less financial burdens and pressure.
What Is A Tuition Fee Loan?
This is a government-funded education loan provided by the Ministry of Education (MOE) of Singapore and is administered by two local banks, DBS and OCBC, to support Singaporean students studying in universities and colleges.
The MOE tuition fee loan is an interest-free loan – during the course of your study – and you’ll only need to start repayment after you’ve completed your studies.
Upon graduation, the interest will start rolling at the average prime lending rate, which is currently at 5.25% per annum. The minimum repayment is $100 per month, and you’ll have up to 20 years to repay the loan.
Tuition loan fees and study loans have slight differences; knowing what they are and how they work is important to make a decision on which education loan is the right one for you.
Tuition Fee Vs Study Loan
There are different types of loans you can take as a student to finance your studies in Singapore. The government has made it possible for students to take both tuition fee loans and study loans to finance their studies, but what’s the difference?
A tuition fee loan helps students in universities and colleges (those in public schools) pay for their tuition fees by covering up to 90% of a student’s subsidised tuition price.
The loan amount you can obtain is determined by the school you attend and the course you are enrolled in.
The main advantage of this loan type is that it comes with a lower interest rate and a longer repayment plan, making it affordable and easy to service.
Let’s look at examples of tuition fee loans available in Singapore.
1. Ministry of Education (MOE) Tuition Fee Loan
Through the Ministry of Education, the government of Singapore allows students from universities and polytechnics to finance their studies by taking out tuition fee loans.
Students in polytechnic institutions are allowed to access up to 75% of their subsidised costs with a repayment plan of 10 years, while those in universities can get up to 90% of their tuition fees within 20 years after graduation.
2. Tuition Fee Loan DBS
Tuition fee loan DBS is another example of a tuition fee loan taken by students to complete their studies.
This loan type requires you to have a guarantor who offers to guarantee the loan repayment within the agreed time.
The DBS tuition fee loan interest rate is dormant while the students are still studying and begins to accumulate after they finish their studies.
On the other hand, the study loan is available to students who have already taken out the tuition fee loan and whose gross monthly per capita income is $2,700 or less.
Since students have many different needs apart from tuition fees, the study loan is used to cover the remaining 10% of the tuition fee price and help meet their day-to-day living expenses.
3. NTU Study Loan
The full-time and part-time programs differentiate this type of study loan from others offered in the country.
For full-time programs, the loan is intended for domestic and foreign undergraduates who want financial support to cover a portion of their tuition and meet their daily financial needs.
The tuition fee loan repayment period starts after graduation with two options available: a repayment period of up to 5 years if the loan is interest-free or 20 years if the loan incurs interest.
Part-time Singaporean students can also use this loan to finance their studies by paying their undergraduate tuition fees with similar repayment terms to those of the full-time program.
Tuition Fee Loans In Singapore: How Does It Work?
Let’s summarise what the Tuition Fee Loan helps students cover:
- Up to 75% of subsidised fees paid by polytechnic students in their courses
- University students pay up to 90% of the subsidy fees.
Since the loan is interest-free during the study period, interest rates only commence upon graduation.
The only difference here is students at the polytechnic level have a maximum of 10 years to repay their loan, while their university-level counterparts have up to 20 years.
Eligibility And Requirements To Applying For Tuition Fee Loans In Singapore
Like any other loan type in Singapore, tuition fee loans also have eligibility criteria and requirements that students need to fulfill before they can be given the loan.
The following students are eligible for a tuition fee loan:
- Full-time students in any of the polytechnics.
- Full-time students under subsidized undergraduate and postgraduate programs in autonomous universities.
- Singapore Citizen students who are studying part-time subsidized undergraduate programs in autonomous universities.
To qualify for the loans, you’re required to have the following:
- Since there are no collaterals when signing for a tuition fee loan, you need a guarantor to guarantee that the loan will still be repaid should you decide to dodge it.
- No income requirement
- No age restriction
- Not receiving any Government/Statutory Board/any school scholarships which cover tuition fees
- Not receiving full Tuition Fee Subsidy from MENDAKI
- Not using CPF savings for payment of 100% of the subsidized tuition fees
- Full-time undergraduate student
- A part-time student pursuing a first undergraduate degree
- Not on self-funded courses
- Not foreign students who are paying full fees
- (not eligible for any Tuition Fee Grant)
How To Apply For A Tuition Fee Loan In Singapore
The loan application process depends on where you’re enrolled as a student. This is because tuition fee loans vary from one institution to another, the type of course and level of education.
- Students at Singapore Management University (SMU) can approach the institution.
- Students at Nanyang Technological University (NTU) or the National University of Singapore (NUS) can approach DBS or OCBC.
- All other students can approach DBS.
Our Verdict
Good education is crucial in building the foundation for every successful career worldwide.
Do not let your finances hold you back from realising your educational goals and dreams.
Horison Credit is one of the certified financial institutions that you can depend on when it comes to getting your tuition fee loans.
You can start your journey to hassle-free education today by contacting them to get you sorted financially in the next few years of your higher education.